Estimates suggest that homeowners will be spending about $52 billion on home renovations in 2021. The reason could be wanting a refreshing look, updating a room to make room for a home office, or adding space for a growing family.
Renovations will also drastically enhance the value of your home, so if you are planning to sell, it is the best idea to invest in a renovation to get a better price.
A personal loan for home renovation has low-interest rates and is a viable way to finance your remodel. You may have saved up for the renovation, but you can use those funds elsewhere and get a loan for this purpose.
With the government promoting home improvement and construction, banks have cut down on interest rates to make loans more attractive. Listed below are the benefits of using a personal loan to cover your home renovation costs.
Frees Up Funds for Alternate Use
You have planned your renovation for months, if not years, and have saved up enough to finance it. Accompany it with low-interest rate personal loans that can help finance your remodel expense completely or partially. You should go for it because the interest rates are low, and you can use the funds for alternate purposes. Some other uses of these funds are listed below.
- Investment with Better Returns: You can invest your savings and earn a better return than the interest that you pay on your loan. Analyse the payoff, and you will see that it makes sense. You can repay the loan over five years, and in the same period, you would have earned a much better return by investing the amount.
- Holiday Shopping: With the holidays around the corner, you could better use the funds for gifts for your loved ones rather than spend the entire amount on a renovation. This will make everyone happy.
- Dream Holiday: Like your dream home, you also have a dream holiday that you plan to go on at some point in life. Now make your dream a reality and finance the home makeover with a personal loan. Use the funds you have saved up for this purpose to go on your dream vacation.
- Retirement Savings: Another way to use the money you save by financing your refurbishment with a personal loan is to save for your retirement or your kids’ college fund. These are big expenses that will come looming over in no time, and having a tidy sum stashed away will give you peace of mind. A personal loan for home renovation allows you to make small payments over several years, even after your renovation is complete.
Attractive Interest Rates: Fixed Vs. Variable Rates
The government stimulus has incentivised homeowners to begin construction and renovation activities in full swing. This has led to banks lowering the rates on personal loans for home renovation and giving you the option to choose from fixed or variable rates. A fixed rate ensures that your monthly payment is the same.
A variable rate is linked to the interest rate policy of the Central Bank, and if the rates reduce, so will your payments. The opposite holds true too. Regardless, the offer is still attractive no matter which type of interest you pick.
The best thing about a personal loan is that you get to pick the tenure. Factors such as monthly income, expenses, other debt payments can be factored in to calculate the monthly for various tenures. You can pick the one that you are comfortable with.
Tenures range from six months to five years. So, if you think that you can repay the loan quickly, you can pick a lesser tenure and save on the interest costs of long tenure loans.
Ease of Applying and Approval
Personal loan seekers are not looked down upon by banks anymore. Banks welcome customers wanting to apply for personal loans. They make the process as quick and simple as possible. This includes a low processing fee, no early payoff penalties, easy to get, transparent approval mechanism, online verification, and paperless documentation. So, you should go ahead and start your online application process immediately.
The Bottom Line
Financing a home improvement can put the project on hold indefinitely. Not any more. A personal loan may come to your rescue. With so many benefits in your favour, you can put that renovation plan into action immediately. With the availability of reputed digital banks, getting a personal loan has become hassle-free.